IMF Chief calls for private sector reforms, fiscal discipline, and global cooperation amid heightened uncertainty

New Delhi [India], October 17 (ANI): The International Monetary Fund (IMF) has urged governments across the world to intensify efforts to strengthen private-sector growth, restore fiscal and monetary resilience, and address widening global imbalances amid an era of high economic uncertainty.

Launching the Global Policy Agenda, IMF Managing Director Kristalina Georgieva emphasized that the private sector "handles uncertainty better" and pressed governments to move ahead with "broad and ambitious domestic reforms." She called for "regulatory house cleaning" to encourage innovation and entrepreneurship, while keeping trade "as an engine of growth."

Her second priority focused on rebuilding fiscal and monetary strength. "Countries must rebuild fiscal space and reduce debt," Georgieva said, underscoring the need for greater reliance on domestic revenues and "smart budget choices." She also warned of financial vulnerabilities in an increasingly interconnected global system, stressing the importance to "preserve price stability and guard against financial stability risks."

Turning to global imbalances, Georgieva said surplus economies such as China need to "boost domestic demand," while deficit countries like the United States should "reduce fiscal deficits and incentivize private savings." Concluding her address, she added, "With change comes opportunity. At the IMF, we will continue to help countries pursue the opportunities in front of them."

At the IMF Annual Meetings' Global Debate, policymakers and economists shared a cautious outlook on global resilience. "Think of the unthinkable," Georgieva advised, as participants agreed that although the global economy has shown resilience, it has yet to face its toughest tests.

Singapore President Tharman Shanmugaratnam noted a "step change" in global trade regimes, pointing out that the adaptability of smaller economies such as Singapore, Costa Rica, Sweden, and Chile stems from their vulnerabilities. "Large countries have to start thinking a little more like small countries, recognizing that there's very little room for complacency," he said.

European Central Bank President Christine Lagarde reflected on how recent crises have challenged traditional models. "We had to navigate a far more difficult situation where a lot of what was happening was not normal at all," she said, adding that this required greater reliance on judgment over models.

Harvard Professor Gordon Hanson observed that while macroeconomic resilience has improved, "microeconomic resilience" especially labor mobility remains a weak point. He cited Costa Rica's successful adjustment after Intel's departure as a model for workforce adaptability.

The debate also turned to artificial intelligence, described by Nasdaq CEO Adena Friedman as "the fastest moving and most consequential technology" shaping productivity and investor sentiment. Lagarde cautioned that AI's benefits must be managed responsibly. "We don't want to create a universe where there would be a massive divide between those who benefit from it and those who suffer as a result," she said. (ANI)

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